It’s been a difficult ride for the crypto market in 2022. By November, the market had dipped by 70 percent from its previous high at the end of November. Just when the market was getting worse after the FTX crash turned them even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips over the years. Every time, it’s bounced back with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. But, in 2017 it broke that record and hit a record record high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke that resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve had another dip. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a prolonged bull run that finally surpasses the resistance created by the previous high price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more companies and industries adopting it, its usage and acceptance is growing. From finance to gaming the use of crypto is increasing in a myriad of ways. And this growing use case could lead to more people getting involved in the crypto market which could drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are starting to explore the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and lead to greater prices.
As the market for crypto grows and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can benefit from blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused through the COVID-19 pandemic and other factors many investors are looking for safe haven assets like gold and crypto. Because the global economic climate remains uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or even individual investors are also beginning to participate in the market for crypto. With increasing numbers of everyday people learn about cryptocurrency and investing in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto grows as more and more people are beginning to become aware about it and comprehend the concept. As the awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing as well as holding the crypto that can raise prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be created upon blockchain technology. As DeFi grows and more platforms and projects come online, this will lead to a rise in adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning to accept crypto as a method of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are government-owned instruments for investing, are now beginning to show interest in crypto as an asset class. As more of these funds allocate a portion of their assets to digital currencies, it could increase demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the main advantages of crypto is the ability to make quick and inexpensive cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto continue to increase it will be more convenient for consumers to purchase and keep crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership in an asset like stock or real estate is a fast-growing area of the crypto market. Since more and more security tokens will be created and traded, it can lead to a higher demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more retailers start accepting crypto as a form of payment, it will make it easier for consumers to hold and use crypto, which could increase demand and price.
So, will crypto grow in 2023? It’s only time to find out. However, with these aspects being considered, it’s likely that the crypto market could be able to see a rebound in 2023. And for those who are committed to the long run Being patient and disciplined will be key.